The advertising industry has fallen all over itself to propose ways for …

A number of privacy groups have spoken out against the adoption of a proposed opt-out plan for behavioral advertising in the US and Europe. The groups are referring to the Advertising Option Icon introduced by the Interactive Advertising Bureau almost one year ago, which purports to make it easy for users to opt out of ad tracking on participating websites with the help of an easily recognizable icon. The system was proposed by the advertising industry as a way to avoid stricter legislation on how they can use information obtained from behavioral tracking, but the privacy groups call it a "flimsy self-regulatory system" that will end up "insufficient and ineffective" at protecting consumer privacy on the Internet.

The Advertising Option Icon is based on an industry report from July 2009 that focuses on education, transparency, and consumer control when it comes to targeted ads. The participating trade groups represent some 5,000 other companies when it comes to advertising on the Web, giving the proposal a higher profile than most when it comes to voluntary opt-out measures. The icon itself is meant to let users know which sites are participating in behavioral tracking and to "enhance the efforts of the growing number of companies that are already using similar mechanisms to deliver enhanced notice to millions of consumers."

When users click on the icon, they are able to read a "clear" disclosure statement about the company's data collection practices. They also have the ability to opt out of being behaviorally tracked by that company, though opting out doesn't necessarily mean they won't see ads anymore. The focus is on targeted ads based on your Internet usage—if advertisers can't target you, they'll just serve up more generalized versions instead. And, of course, the system is voluntary, meaning that there could be thousands of sites that continue track you across the Internet without showing the icon.

The collective organization that is now speaking out against the icon is called the TransAtlantic Consumer Dialogue (TACD), which is made up of groups like the Electronic Privacy Information Center, Public Citizen, and the Center for Digital Democracy, as well as others on both sides of the Atlantic. The TACD wrote an open letter to top officials in both governments on Thursday, asking them "to reject the current [online behavioral advertising] self-regulatory regime as inadequate, and work with industry and consumer and privacy groups to ensure that significant revisions are made to protect consumer privacy."

The complaints include the effectiveness of an icon-based system, which TACD says is an insufficient means of tipping users to the "wide range of data collection that they routinely face." The group also cites research showing that very few users ever click on icons of this nature, and even fewer manage to opt out. Not that it matters if they did, as TACD says sensitive data like the user's health information or finances can still be collected under the proposal, not to mention that the opt-out tool is based on browser cookies, making them (at best) temporary and subject to user error.

The TACD feels so strongly about the kinks in the voluntary system that it argues the industry is actually setting itself up to collect more data from users.

"The Digital Advertising Alliance in the US and IAB Europe/EASA, we believe, have created systems principally designed to enable the expansion of OBA- related data practices," TACD wrote in its letter. "[C]onsumer and privacy NGOs are not opposed to digital marketing. Our concern is the same as yours; to ensure that consumers can effectively protect their privacy in today’s digital media environment."

The groups are asking the US and EU governments to perform investigations into the real-time tracking and sales of personal information online, commit to developing a global common standard for protecting privacy, make sure there's proper enforcement and implementation of the rules, and adopt measures that go beyond the cookie-based system pushed by advertisers. The goal is to force both governments to wake up and take further action than what the advertising industry has proposed, largely because the groups believe that the industry simply cannot be trusted to look out for consumers.

"With the White House soon to release a new privacy 'white paper' that likely will rely on this flimsy self-regulatory system as a way to protect consumer privacy, today's unique joint action by US and EU consumer and privacy groups sends a powerful message that such a plan will be insufficient and ineffective," Center for Digital Democracy executive director Jeff Chester wrote in an e-mail to Ars.